More than a year and a half after the Eaton and Palisades fires tore through Los Angeles County, roughly two-thirds of survivors are still displaced from their homes, and now the program that helps them fight through insurance denials, FEMA appeals, and SBA loan paperwork is on the verge of running out of money entirely. California's Disaster Case Management Program, which has nearly 1,400 open case files and about 700 families on a waitlist, is set to lose its remaining state backup funding by October 31, threatening the jobs of roughly 109 caseworkers spread across Los Angeles County nonprofit partners.
The crisis traces back to a federal funding gap that California has been quietly covering out of its own coffers for months. According to the Spectrum News report, FEMA approved 24 months of funding for the program in May 2025, but has since sent only a single $3.3 million installment and no additional payments, even though the agency had committed to four equal disbursements running through May 2027. California state officials say the federal money has never fully materialized, and the state has stepped in with $9.9 million of its own funds just to keep the program running while it waits on Washington.
Those state funds are now nearly gone. Pasadena Now reports that California originally requested $26 million for the two-year initiative, and while FEMA approved roughly $13 million in May 2025, the agency had disbursed about $3 million as of this month, per Pasadena Now. That leaves nearly $10 million in already-approved funds sitting withheld. Catholic Charities of California currently administers the program under contract with the state, but only until that $9.9 million runs dry.
Lawmakers Demand Answers From FEMA
Frustration in Washington has been building for months. Representatives Brad Sherman and Judy Chu, along with Senators Adam Schiff and Alex Padilla, wrote to FEMA Administrator Cameron Hamilton at least twice pressing for the funding to be released, according to Spectrum News, and the lawmakers say they received no response. FEMA itself did not respond to inquiries from the outlet either.
Sherman put the stakes bluntly, telling Spectrum News that the program cannot continue without federal reimbursement. The bureaucratic friction runs deeper than a single missed payment: on September 11, FEMA Region 9 rejected California's supplemental request for an additional $6.57 million in case management funding, citing insufficient cost justification, a decision state officials have formally appealed, per the same Pasadena Now reporting. Lawmakers have also noted that FEMA attributed some of the installment delays to prioritizing other, non-disaster grant deadlines.
Nonprofits Already Winding Down Cases
The Community Organized Relief Effort, known as CORE, has already begun closing a number of cases in preparation for the funding running dry, according to Spectrum News. CORE has helped 904 households since the fires and still carries hundreds of active cases along with hundreds more households on its wait list. Matt Gsell of CORE said the organization cannot sustainably operate month to month under these conditions.
Gsell estimated that homeowners affected by the fires are underinsured by anywhere from $5,000 to $250,000, and he said the complex systems survivors must navigate, along with rebuilding-related fraud risks, make advocacy for FEMA appeals and insurance claims essential. Catholic Charities of California is working to identify a partner to keep the program alive through donations, but the organization has no published clear plan to continue services once state funds are exhausted.
What's Lost If the Program Sunsets
The stakes are not abstract. Referrals generated by caseworkers under the program helped Los Angeles wildfire survivors secure more than $100 million in direct financial and housing assistance between January 2025 and this month, according to the Official Press Office of Rep. Judy Chu. Case managers provide individualized help as survivors navigate recovery resources. Over 1,000 of the program's active cases stem from Altadena's Eaton Fire burn scar alone.
The program is authorized under Section 426 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, which provides authority for FEMA-administered disaster case management, according to the U.S. Federal Emergency Management Agency. The May 2025 approval was for a 24-month period expected to run through May 2027, making the current disbursement shortfall harder for advocates to square with the program's original design.
The financial gap facing survivors compounds the urgency. A May 2026 survey of over 2,000 fire survivors, conducted by the nonprofit Department of Angels, found Altadena homeowners face an average rebuilding cost shortfall of roughly $550,000 beyond insurance payouts, with nearly 40% having exhausted or nearing exhaustion of their temporary housing benefits, as Hoodline previously reported. That same reporting noted federal officials approved an extension of FEMA's Individuals and Households Program in June 2026, continuing direct housing and financial assistance, even as the case management support required to navigate that aid now faces collapse.
The Justice Department has alleged that Southern California Edison equipment caused the Eaton Fire and filed a federal lawsuit against the utility seeking damages. The Eaton Fire burned 14,021 acres, according to Cal Fire incident totals cited by Pasadena Now; it destroyed 9,418 structures and killed 19 people in Altadena, while the broader January 2025 fires burned over 37,000 acres and killed 31 people across Los Angeles County. With state funding for case management expected to run out by the end of October, survivors and lawmakers alike are left waiting to see whether FEMA releases the withheld millions before the program's caseworkers are laid off entirely.
